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Today, Tory MP Nick Boles, Lib Dem former health minister Norman
Lamb and former Blairite health minister Liz Kendall joined forces to promote
the idea of a dedicated ‘health and social care tax’, through National Insurance,
to replace current NHS funding. Boles grandly proclaimed it “A new Beveridge
moment”.

The main lesson to be drawn from their interview broadcast on this
morning’s BBC Radio Four Today programme, is that it doesn’t take much to
excite the media about anything that could be portrayed as - if not the birth pangs, perhaps at least the twinkle in an eye - of a ‘new centrist party’
run by ‘grown-ups’.
A rehash of an old, bad idea that’s been doing the rounds in right-wing circles for
years? That will do just fine.

The interview – conducted by the BBC’s political editor Laura
Kuenssberg not its health editor Hugh Pym – was notable for its lack of interest
in whether such a plan actually had anything useful to offer today’s NHS. Kuenssberg’s
line of questioning focused exclusively on the politics: “I mean here we are,
an extraordinary degree of consensus…You’re all saying that the parties have to
share the political risk… that none of the party leaderships right now are up
to this task…”.

The stale idea of an ‘NHS tax’ is perfect for those who’ve pinned
their hopes on the creation of a ‘new centrist party’. It’s a technocratic
issue that’s unlikely to be well understood by most voters, many of whom are
under the mistaken impression that National Insurance is what funds the NHS
already. The history is slightly complicated, but the health
service is still overwhelmingly funded as Nye Bevan set out when he explicitly
rejected the 1911 National Insurance-based system of healthcare as unfair and "peculiarly unsuitable" and instead
set up the NHS:

“The means of collecting the revenues for the health service are
already in the possession of most modern states, and that is the normal system
of taxation. This was the course which commended itself to me and it is the
basis of the finance of the British Health Service. Its revenues are provided
by the Exchequer in the same way as other forms of public expenditure. I am
afraid this is not yet fully understood. Many people still think they pay for
the National Health Service by way of their contribution to the National
Insurance Scheme.”

Why ‘comprehensive’ healthcare matters

The ‘NHS tax’ idea is also the antithesis of what campaigning
politics is about – focusing, as it does, on inputs rather than outcomes.

The public want an NHS that provides the healthcare they need,
when they need it – in other words, a comprehensive and timely service. And to the dismay of right-wingers, the public has remained firmly
wedded to this outcome that was at the heart of the founding of the NHS. To the idea that it's the state’s duty to provide a comprehensive healthcare service for everyone (though that duty
was significantly weakened - some
say abolished - by the 2012 Health and Social Care Act).

The ‘NHS tax’ idea seems unlikely to appeal to any
particular demographic of voters. But of course, it could well appeal to a group
that most of the ‘centrist party’ fans seem to consider far more important – potential funders.
If you look closely at what’s said – and unsaid - in the Boles/Kendall
principles, there’s a lot of music to the ears of corporations and the rich.

The dangers of an “NHS tax”

The most obvious problem in using National Insurance to pay for
the NHS is that it is a deeply regressive tax that is capped for the rich. Boles and Kendall nod to this problem, but say only rather vaguely that “higher earners, the self employed, and better off
pensioners” will make a “fair” contribution. But if this government is offered
a choice between meaningfully reforming a huge loophole that lets them tax poor
people more heavily than rich ones – or just loading massive new costs onto an
unreformed tax that doesn’t upset the Daily Mail, in the name of ‘saving the
NHS’ and ‘a new consensus’ – which do you think Theresa May might pick?

Funding through the NHS through the National Insurance system is not
just regressive, though. There are other dangers.

Secondly, separating out our payments for the NHS and channelling
them through the contributions-based National Insurance system would make it far
easier in future to exclude people who – for whatever reason - haven’t earned
enough to pay sufficient contributions.

Liz Kendall told me in January “I do not
support…social insurance”. But the scheme Boles has persuaded her to sign up
to looks an awful lot like social insurance in many respects. Admittedly, it
does commit to ‘universal’ provision (rather than contributions-based provision)
– but how long would such a commitment last, when the mechanism made it so easy
to exclude people who could be labelled as ‘less deserving’? (Indeed, we ought
to be careful when we’re making the case for the Windrush generation to receive
healthcare, that we don’t over-emphasise the fact that they’ve ‘worked and paid
taxes’, but rather focus on defending the right to universal, comprehensive
healthcare as one of Britain’s highest achievements).

Another danger of an ‘NHS tax’ is that such a scheme would also be
likely to create pressure to grant an ‘opt out’ for those who pay for private
health insurance – much like the NI reforms Thatcher introduced in 1988 which
allowed those who signed up to private pensions to opt out of the State Second
Pension (with disastrous results). Once an opt-out is allowed, we’re into two-tier
healthcare and delivering the insurance firms’ dream.

And what of the contributory benefits we currently have? Boles
suggests that the entire National Insurance fund be renamed the ‘National
Health and Care Fund’. If our healthcare, sick pay and state pensions are all supposedly coming from the same pot, could we in future see them paid out as a merged
allowance, from which people can buy their own healthcare from a range of
‘providers’, alongside
their fuel bills and weekly shop, topping up from their own money when their 'entitlement' payment runs out? This might sound like a distant Thatcherite
dystopia, but it’s a set of ideas some on the right – including the Labour
right – have flirted with. Then Chancellor
George Osborne floated
the possibility of ‘integrated budgets across health and employment' back
in 2014, not long after New
Labour think tank DEMOS had laid the groundwork by suggesting that
benefit and healthcare 'entitlements' could be merged on one ‘entitlement card’.
Already the use of fixed ‘entitlement’ sums (known as ‘personal budgets’) is
entrenched in social care – and the concept is now being rolled
out with little fanfare into healthcare, enthusiastically promoted by another Blairite former Health minister Alan Milburn, and by Liz
Kendall herself.

Jeremy Hunt has written to all Tory MPs asking for their ideas for the future of the NHS,
and both he and Theresa May have said that they’ll launch a new “long term
plan” for the NHS this summer – probably timed to coincide with its 70th
birthday. The “centrists” have a truly lousy birthday present up their sleeve.
It’s up to the rest of us to keep a close eye on them.

Because – as Bevan said, and as we’ve been reminded of in recent
weeks:

“Society becomes more
wholesome, more serene, and spiritually healthier, if it knows that its
citizens have at the back of their consciousness the knowledge that not only
themselves, but all their fellows, have access, when ill, to the best that
medical skill can provide.”

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